Reported interest rate hikes on China's exports as tariff talks with us will begin | Trade War News

China has shifted exports since Trump announced the penalty for taxes, but is eager to avoid the threat of a trade war in its first meeting.

China reported that in April, its export growth exceeded expectations when it prepared for tariffs with the United States.

Outbound goods from the world's second-largest economy rose 8.1% last month, according to government data released on Friday. In a trade war launched by U.S. President Donald Trump, the result is much higher than economists' forecasts.

Overall export growth in April was still declining in April despite Trump's announcement of general tariffs on Chinese goods.

Analysts say China appears to have successfully shifted efforts to other markets.

“Reports about the death of Chinese exports look exaggerated,” said Lynn Song, chief economist at Dutch Bank International. “However, slice it and the data look better than most market participants expected.”

These figures may also be driven by demand for materials from overseas manufacturers during the 90-day pause of U.S. tariffs.

Zichun Huang, an economist in capital economics, warned that China's export growth could be "negative" later this year, with exports to the United States going to "more decline" in the coming months, "not all of which will be offset by increased trade with other countries."

The risk of quarantine

The data was released the day before China's trade envoy, Lifefeng, sat with U.S. Treasury Secretary Scott Bessent in Geneva, the Swiss capital.

The talks will be the first formal participation in trade between Beijing and Washington, as Trump's 145% tariff on Chinese goods hit tariffs, prompting China to retaliate by 125%.

Reuters quoted a report from sources who spoke on condition of anonymity that Chinese officials have become increasingly shocked by the impact of the tariff war on the economy after working behind closed doors, as Chinese trading partners begin negotiating deals with Washington, the risk of isolation.

The proposal for the Geneva negotiations highlights the different approaches to negotiations between the two sides, and Trump reportedly promoted direct negotiations with Chinese President Xi Jinping.

The proposal was rejected, according to Reuters, citing a source, in part because Beijing was shocked in February's public condemnation of Ukrainian President Volodymyr Zelenskyy.

Any unscripted hostile interaction between the U.S. and Chinese leaders will be seen as an unacceptable loss of faces for XI, sources said.

"I think both sides are in a balance and trying to look strong and not be responsible for sinking the global economy," said Scott Kennedy, an expert in Chinese business affairs in Washington.